Central Alberta farmers, investors and local governments continue their efforts to save an area rail line.
Badlands Railway Company Ltd. began more than a year ago to buy the 286 kilometre Canadian National Railway line from Lyalta, east of Calgary, to Oyen in east-central Alberta.
Last year, CN gave notice of its intention to abandon the line, which would eliminate rail service in an 80,000 sq. km area of the province.
CN said there was not enough business on the line to justify keeping it open.
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Local groups said losing the line would eliminate the possibility of future economic development in the area. It was officially put up for sale in December 2009.
CN spokesperson Kelli Svendsen said the railway does not comment on commercial negotiations.
“But what I can confirm is that the parties (CN and Badlands) could not come to a transfer agreement in the time line specified.”
Badlands president Barrie Hoover said the main obstacle was the net salvage value (NSV) of the rail line.
Badlands offered $17 million for the line, while CN asked for $23 million, reflecting the two sides’ differing calculations of the NSV.
At one point, Badlands offered to lease all or part of the line, Hoover said, but the railway wasn’t interested.
Once negotiations broke down, CN offered the line for sale first to the Alberta government, which said no, and then to municipalities on the line, which is a process laid out in the Canada Transportation Act.
Svendsen said municipalities on the eastern end of the line between Hanna and Lyalta have accepted the railway’s offer and CN expects to complete the transfer by next summer.
However, municipalities on the west end of the line between Oyen and Hanna did not accept the offer, and CN discontinued operations Oct. 19.
Hoover said it remains unclear how all this will turn out.
“We’re struggling with whether CN even wants to sell it. It seems they just want to close the line no matter what anybody does and I’m not sure why.”
He said Badlands has asked CN for further meetings on the line, to no avail.
“So far the only response is, ‘no, no, no.’ ”
